Asia Pacific Market: Stocks shine on evidence of a pickup in global manufacturing

Asia Pacific market advanced on Tuesday, 03 September 2013, , as upbeat manufacturing data from China and Europe boosted investors optimism the global economy is recovering and prompting them to buy a broad range of riskier issues.

Advance in the regional market largely came on further signs of improvements in global manufacturing. Markit's euro-zone purchasing managers' index rose to 51.4 in August from 50.3 in July - with a score above 50 indicating an increase in factory activity. In terms of individual countries, the readings from both Germany and Italy were particularly strong.

The factory figures from Europe added to an upbeat picture from China, where on Sunday the Chinese official PMI hit a sixteen-month high of 51 points. This added to a picture of stability in Asia's largest economy and resulted in strong gains for the region's markets.

The Purchasing Managers' Index was at 51.0, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Sunday. A separate manufacturing PMI released on Monday by HSBC Holdings Plc. and Markit Economics rose to 50.1 last month from 47.7 in July, the biggest gain in three years and the first reading above 50 since April.

Meanwhile, the likelihood of delay US-led attack against Syria also aided risk sentiments for stocks. US President Barack Obama's on Monday met with key US lawmakers to try to drum up support for military strikes against the regime of President Bashar Assad to respond to an attack in the Damascus suburbs last month that the U.S. says killed at least 1,429 civilians. A vote could come once Congress returns from its summer break, which is scheduled to end Sept. 9.

Obama announced over the weekend that he would seek approval from Congress for military strikes, but he faced scepticism among many U.S. lawmakers about the intelligence regarding the chemical attack and the value of an intervention to United States interests.

Among Asian market, Tokyo market finished sharp higher, as better than expected August manufacturing data from China to euro-zone improved investor sentiment. Meanwhile, the US decision to postpone a military intervention in Syria and yen depreciation against the greenback to a one-month low at the mid-99 yen level, also aided sentiments. The Nikkei Stock Average advanced 405.52 points, or 2.99%, to end the day at 13,978.44, it's highest since Aug. 14.

Shares of export related stocks advanced in Tokyo as the yen fell to mid-99 level per dollar, boosting the value of overseas earnings when repatriated. Carmakers were leading exporters rally ahead of release U.S. August sales figures. Toyota Motor Corp rose 3.3% to 6200 yen, Honda Motor Co 2.4% to 3655 yen and Nissan Motor Co 3.2% to 1012 yen.

Tokyo Electric Power Co. gained 3.4% to 525 yen after the chief government spokesman said government plans to use 47 billion yen to tackle a massive build-up of radioactive water at the crippled Fukushima Daiichi nuclear power plant. Nikkei newspaper also reported earlier today that the Japanese government plans to spend at least 40 billion yen ($402 million) to deal with a leak of radioactive water at the disaster-struck Fukushima Daiichi nuclear power plant.

Kansai Electric Power Co. soared 8.1% to 1,217 yen after a panel of seismologists and geologists said an earthquake fault-line under the utility's Ohi plant may not be active.

Kawasaki Kisen Kaisha climbed 1.8% to 225 yen on a report the Japanese shipper ordered four new car carriers worth about $30 billion yen.

Fast Retailing Co shares rose 4% to 34050 yen after the retailer announced August sales at its Uniqlo clothes chain jumped 28.9% from a year ago on a same-store basis, as an aggressive ad campaign and record high temperatures prompted customers to snatch up summer clothes.

In Australia, Australian share market closed modest higher, as gains in miners, energy and utilities and industrials helped to offset weakness in the gold, retailer, and consumer goods names.

Shares of material s and resources went higher in Sydney on the back of an overnight rise in spot iron-ore prices and upbeat manufacturing data out of China to Europe. BHP Billiton rose 0.6% to A$35.82 and Rio Tinto added 3.1% to A$61.05.

Banking and financial stocks also traded higher after Australia's central bank hold the benchmark interest rate at 2.5%. Commonwealth Bank dropped 0.2% to A$73.55. shares of Westpac Banking Corp rose 0.4% to A$31.94, National Australia Bank 0.2% to A$32.91 and Australia & New Zealand Banking Group 0.2% to A$30.05.

Airline Virgin Australia gained 1.5 cents to 42 cents after the competition watchdog granted conditional approval to its trans-Tasman alliance with Air New Zealand.

The Australian Bureau of Statistics said on Tuesday that Australia's current account deficit widened to a seasonally adjusted A$9.4 billion in the second quarter of 2013 from the first quarter. The deficit in the first quarter was A$8.7 billion, the ABS said. The deficit on goods and services, in seasonally adjusted terms, stood at A$18 million over the quarter, which is expected to subtract 0.04%age points from gross domestic product, or GDP, growth in the second quarter. Australia's net foreign debt rose 3% in the second quarter from the first to A$762.17 billion, the ABS said.

In separate report, the Australian Bureau of Statistics said on Tuesday that Australian retail sales rose by0.1% from a month earlier. Department store sales fell 7.9% In July, the biggest monthly fall in a year. Meanwhile, sales of household goods rose 1.8%, the biggest rise since February, the ABS said.

In China, Chinese market finished inched higher, as better-than-expected Chinese manufacturing data and comment from Chinese Premier about domestic economic growth improved investor sentiment, prompting them to buy a broad range of riskier issues.

Premier Li Keqiang said he's confident China will achieve its economic targets for this year, while Goldman Sachs Group Inc. boosted its 2013 growth forecast for the nation to 7.6% from 7.4%.

China's official purchasing managers' index (PMI) for the non-manufacturing sector dipped slightly to 53.9 in August from July's 54.1, the National Bureau of Statistics (NBS) said on Tuesday. A reading above 50 indicates activity in the sector is accelerating, while one below 50 indicates it is slowing. The services sector index followed the bureau's manufacturing PMI on Sunday, which showed China's factory activity expanded at the fastest pace in more than a year in August with a jump in new orders.

Shares of real estate developer went higher in Shanghai on news that mainland home prices rose 8.6% year-on-year in August. Shanghai Shimao Co rose 3.2% to 10.28 yuan, China Vanke 4.5% to 9.71 yuan and Gemdale Corp 4.5% to 6.51 yuan.

Environmental stocks climbed after Beijing unveiled another raft of measures to curb pollution, such as limiting the number of new vehicles on the roads, to curb pollution. Beijing Capital added 2.3% to 6.81 yuan and Tianjin Capital Environment Protection Group Co 0.9% to 8.21 yuan.

In Hong Kong, Hong Kong's market ended higher, as upbeat manufacturing data from China and Europe boosted optimism the global economy is recovering. The Hang Seng Index rose 1% to 22,394.58 and the Hang Seng China Enterprises Index added 1.95% to 10,250.97.

Among the 50 HK blue chips, 43 were up and six were down, with 1 stock remaining steady. China Coal added 4.7% to HK$4.89, while China Merchants slipped 1.1% to HK$26.35, making themselves the biggest blue-chip gainer and loser. . FIH (02038) soared 5.8% to HK$5.29, and TCL Comm (02618) jumped 7.6% to HK$4.66 after Microsoft announced its acquisition of Nokia's devices & services business.

Shares of big paper companies advanced on speculation of industry consolidation after the Chinese government said the paper industry suffered from overcapacity. That is an indication that there will be efforts to eliminate smaller companies in favour of bigger ones. Nine Dragons Paper jumped 13.3% to HK$5.98 and Lee & Man Paper Manufacturing surged 7.6% to HK$4.98.

In India, Indian benchmark indices further weakened and hit fresh intraday low in mid-afternoon trade as a sharp slide in rupee against the dollar spoiled sentiment. At 14:20 IST, the S&P BSE Sensex was down 382.36 points or 2.03% to 18,503.57. The index fell 458.44 points at the day's low of 18,427.69 in mid-afternoon trade, its lowest level since 30 August 2013.

The partially convertible rupee was trading 67.62 sharply lower than Monday's close of 66. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit.

Elsewhere, South Korea's Kospi index climbed 0.46% and Taiwan's Taiex added 0.6%. New Zealand's NZX 50 Index advanced 0.2%. Malaysia's KLSE Composite rose 0.4% and Indonesia's JKSE Composite added 1.5%. Singapore's Straits Times Index sank 0.03%.

Trading in US index futures indicated that the Dow could gain 123 points at the opening bell on Tuesday, 3 September 2013. US stock markets remained closed on Monday, 2 September 2013, for the Labor Day holiday.

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